Gillian Kasempa Mutinta v New Future Financial Company Limited and Ors (2020/HPC/0125) [2021] ZMHC 94 (20 May 2021)

IN THE HIGH COURT FOR ZAMBIA AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: 2020/HPC/0125 NEW FUTURE FINANCIAL COMPANY LTD 1 ST DEFENDANT ZHONG CHENG ZAMBIA MINING AND C J, \!\ r' 1,:r,0vJ BUILDING MATERIALS COMAPY LTD 2ND DEFENDANT BEFORE: HON . MR JUSTICE E. L. MUSONA. For the Plai111iff Mr. C. Ng 'a n d u with Mr. I. Tindi both of Messrs Japhet Zulu Ad uoca tes For bolh Def e nclants: Mr. L. Mwan a bo w ith Mr. G. Hakclins i w ith of J\,fessrs L. M . Cha mbers JUDGMENT Date : 20th May, 2021 J l Cases referred to: 1. Chuba v The People (1977) ZR 272 2. Sithole v State Lotteries Board (1975) ZR 106 • Legislation referred to: 1. S. 15 of Money Lenders Act Chapter 398 of the Laws of Zambia 2. S. 33 and S. 34 of the Lands and Deeds Registry Act Chapter 185 of the Laws of Zambia J2 .. • • This matter was commenced by writ of summons with an accompanying statement of claim on 25 th February 2020. The Plaintiff's claim is for the following reliefs; i) An order of declaration that the purported registered assignment of Stand No. 462 Chilanga from the Plaintiff to the 2nd Defendant dated 4 th July 2019 was fraudulent and therefore null and void; ii) An order of declaration that the Plaintiff is still the rightful proprietor of Stand No. 462, Chilanga and as such the Certificate of Title relating to the said stand should be a ltered back to her names accordingly; iii) An order of declaration that the transaction of 12th July 2017 between the Plaintiff and the 1st Defendant, to advance to the Plaintiff an amount of K300,000.00 was for all intents and purposes a mortgage and not a sale; iv) An order of declaration that the charge by the 1st Defendant of interest at 4 7% for a period of six months is unlawful and void ab initio for being excessive and unconscionable; v) An order of declaration t_hat the amount payable by the Plaintiff to the 1st Defendant, shall be K300,000.00 plus J3 ie • such interest _as a money lender is permitted to charge by law; Alternatively, to the reliefs 1n (iii), (iv) and (v) above, the Plain tiff seeks: vi) Damages for breach of the alleged contract of sale relating to Stand No. 462, Chilanga between the Plaintiff and the 1st Defendant dated 12th July 2017 for non-payment of the alleged full purchase price and fraudulent change of ownership; vii) Rescission of the contract referred to in (vi) above; viii) Costs. The Plaintiff called four (4) witnesses. I shall refer to these witnesses as PWI, PW2, PW3 and PW4 respectively. All the Plaintiff's witnesses filed witness statements and relied on those witness statements at trial . PWl was F /Gillian Mubanga Mutinta Kasempa who relied on her witness statement which was filed on 2 nd October, 2020. The witness statement by PW 1 was that she was a widow to her late husband Joseph Mubanga who was a registered proprietor of property number Chila/ 462 which he held on a state lease for a period of 99 years from 1s t January, 2000 on certificate number 174416. After the death of her husband and owing to the financial J4 challenges which PWl was going through, she approached the 1st Defendant Company for a loan which was in the business of giving loans. What PWl wanted was a loan of K300,000= but after calculating interest payable and other charges for the amount needed PW 1 was advised that she would repay approximately total of K600,000. PWl was also informed that the loan was collateral based. That meant that PWl needed to pledge a property with value above the loan amount together with interest payable in order to qualify for the loan. PWl presented the certificate of title number 174416 which was still in the name of her late husband. A Mr. Moffa t Mwanambulo who was an employee of the 1st Defendant was assigned to assist PWl with the process of changing title. Mr. Moffat Mwanambulo obtained various documents from PW 1 and sometimes required PW 1 to sign certain documents whose n ature PW 1 has now alleged that she did not understand but which ' . she admits being told that they were necessary to complete the process of changing title from h er late husband's name to the name of PWl. While the process of changing title was underway, a Chinese National who PWl came to know as Linda from the 1st Defendant and her colleague went to the property in issue for purposes of verifying whether or not it was worthy the value of the loan PW 1 JS had applied for. After that, it was confirmed that the property was worthy the value stated in the valuation report which PW 1 had presented to the 1st Defendant and was, therefore, sufficient security for the loan. When title for the property in issue was issued in the name of PW 1, PW 1 collected her certificate of title number CT 34028 for property number Chila/462. • When PWl was availed the agreement to sign and which, of course she signed, she noticed a different figure reflected on the agreement. When she inquired from the 1st Defendant, PWl was told that the principal amount, interest, security deposit and other service charges reflected on the documents as one figure. PW 1 received Kl00,000 cash from the 1st Defendant and a further K200,000 was paid by bank transfer confirming a total of K300,000 the loan amount. PW 1 denied signing a contract of sale but admitted signing a loan agreement. PWl was supposed to repay the loan in 6 months, when the loan fell due for repaying PW 1 was unable to pay back. Accordingly, she decided to sell the disputed property in order to pay off the loan. So, PW 1 asked for an extension of time within which PW 1 could pay back the loan. PW 1 noticed that her prospective buyers were losing interest in the house. This aroused some suspicion in the mind of PW 1. PW 1, then, proceeded to the Ministry of Lands to check on the J6 status of this disputed house. That inspection revealed that a new certificate of title number CT 59 8411 for property number Chila/ 462 was issued to the 2 nd Defendant. PW2 was M/Nsama Oliver a detective Police Officer in the Zambia Police and a handwriting expert. PW2, by his witness statement told this court that he knew about this matter when a copy of a deed of assignment bearing the • disputed signature with random specimen signature samples of Gillian Mutinta Kasempa were submitted to his office for examination. The said Gillian Mu tin ta Kasempa is PW 1 in this case. The examination results are on page 87 and 88 of the Plaintiff's bundle of documents. The results show that there were strong dissimilarities between the signature on the deed of assignment in question with the provided random specimen signature samples of Gillian Mutinta Kasempa. PW3 was M/Derrick Mundia. The evidence for PW3 was that he introduced PWl to the 1s t Defendant through a Mr. Banda who PW3 knew as a Credit Officer of the 1st Defendant. When PWl who was accompanied by PW3 met Mr. Banda at the offices for the 1st Defendant, PW 1 expressed interest in acquiring a loan facility from the 1st Defendant. The said Mr. Banda explained to PWl issues to do with interest expected to be paid and the modalities on how the money obtained would be paid back. He also J7 explained that property needed to be pledged for such loans and the value expected of such property. PW4 was F /Elimeth Kasempa. The evidence for PW4 was that she accompanied PWl to the office of the 1st Defendant for the purpose of obtaining a loan from the 1st Defendant. PWl is the Plaintiff in this case. The 1st Defendant gave PWl Kl00,000= as part payment for her loan and the 1s t Defendant promised to deposit the rest of the money into her bank account. e Conversely, the 1s t Defendant called one witness. I shall refer to this witness only as Defence witness (DW). DW was M/Fen g Shen g Hu who is Director and Deputy Manager for the 1s t Defenda n t Company . The eviden ce for DW was that on 12th July 2017, the 1st Defendant executed a contract of sale with the Plaintiff for the sale of house No. 462 Chilanga . Tha t on 13th July 2017 the 1st Defendant paid the Plaintiff USD 67,800. D W stated in his eviden ce tha t the Pla in tiff (PW 1) had a n option of buying back the property from the 1st Defendant if PWl paid back the money advanced to h er by 11 th January, 2018 failure to which the ownership of the property would be changed to the 2nd Defendant. JS .. .. • On 11 th January, 2018, the Plaintiff failed to buy back the property and since the Plaintiff had already obtained state consent to assign, the 1s t Defendant proceeded to draw a deed of assignment which was signed by the Plaintiff (PWl) and changed the ownership of the property to the 2 n d Defendant. The Defendants have disputed the Plaintiff's claims and have argued that there was a sale between the Plaintiff and the Defendants . The Defendant s have put up a counter claim in their defence. The following is the counter claim by the Defendants; 1. An order gr anting possession to the Defendants and directing th e Pla intiff to vaca te Stand No. 462, Chilanga. 2. Payment of Mes n e profits or capital occupation fee from the d a te of la p se of the buyback periods being 11 th January, 2018 of not th an 1700 USD per month until the date of vacation of the prop erties. 3 . Damages for inconvenien ce. 4 . Alterna tively, a n order directing the Plaintiff to p ay back US$ 6 7 ,800.00 t ogether with moneta ry los s 4 2 500 USD , including but n ot limited to interest and profits and Me sne profits or capita l occupation fees a s stated above whose total J9 .. • as at 10th March, 2020 is 1110300 USD and the Plaintiff should bear all the costs for registering the properties back into her names. 5. Interest on any amounts found due 6. Costs against the Plaintiff 7. Any other relief the court may deem fit . I have considered and analyzed the evidence by the parties. I shall now consider the claims seriatim. Claim i: An order of declaration that the purported registered assignment of Stand Number 462 Chilanga from the Plaintiff to the 2 nd Defendant dated 4 th July, 2019 was fraudulent and, therefore, null and void. The evidence in this case is clear. The evidence is that the Plaintiff did not sign any deed of assignment. The Plain tiff, too, has denied ever signing a deed of assignment inrespect of property number Chila/462. PW2 is a handwriting expert who was called to verify the authenticity of that signature on the d eed of assignment. When PW2 examined the signature on the deed of assignment, he noticed dissimilarities. The report of PW2 J10 • who is handwriting expert is on page 87 - 88 of the · Plaintiffs bundle of documents. The relevant part of that r eport reads as follows; "Strong dissimilarities between the signature on the deed of assignment dated 2019 in question with the provided random specimen signature samples of Gillian Mutinta Kasempa" Also, the conclusion of that report r eads as follows; "The primary features observed in terms of proportion alignment, stroke connection which is consistent indicates with certainty that the signature alleged to have been signed by Gillian Mutinta Kasempa is not similar with his submitted random specimen signature samples" Am alive to the d ecision in the case of Chuba v The People ( 1) wherein the court held that; "The evidence of a hand writing expert is an opinion and the matter is one on which the court has to make a finding .... " I h ave considered the opinion of the h a ndwriting expert. M y finding will follow. Jll .. I have also looked at the case of Sithole v State Lotteries Board (2) and Am well guided. Am not required to blindly accept what the handwriting expert has said, but having looked at and examined the opinion evidence of the handwriting expert Am to make my own independent finding. I have also looked at the evidence of the Plaintiff (PW 1) denying having signed the deed of assignment and disputing the authenticity of the signature thereon. My finding is that the assertion by the Defendants that the Plaintiff (PWl) executed/signed a deed of assignment h as not been proved . On the a bove b asis, I find that indeed, the purported registered assignm ent of stand number 462 Chilanga from the Plaintiff to the 2 nd Defendant was smudged with fraud. For the above reasons, I d eclare the registered assignment of stand number 462, Chilanga from the Plaintiff (PWl) to the 2 nd Defendant null and void. Claim ii: An order of declaration that the Plaintiff is still the right proprietor of stand number 462, Chilanga and as Jl2 such the certificate of title relating to the said stand should be altered back to her names accordingly Am alive to the provisions of sections 33 of the Lands and Deeds Registry Act Chapter 185 of the Laws of Zambia. That section provides as follows; "A certificate of title shall be conclu~ive as from the date of its issue ...... " However, under Section 34 of the Lands and Deeds Registry Act Chapter 185 of the Laws of Zambia, a certificate of title can be challenged and cancelled for fraud. I have a lready nullified the purported registered assignment of stand number 462, Chilanga from the Plaintiff (PW 1) to the 2 nd Defendant. I have already given ~ reason. Noting that the purported registered assignment of stand number 462, Chilanga from the Plaintiff (PWl) to the 2°d Defendant has been · nullified , it follows that the certificate of title relating to the said stand number shall b e altered back to the Plaintiff (PWl) and so, I order. J13 I Claim iii: An order of declaration that the transaction of 12th July, 2017 between the Plaintiff and the 1st Defendant, to advance the Plaintiff an amount of K300,000 was for all intents and purposes a mortgage and not a sale. - The Plaintiff has averred that the transaction was a loan and not a sale. That she pledged her property as security because the loan was collateral based. PWl averred that on the date of the agreement, the Plaintiff surrendered her certificate of title to the 1st Defendant and signed an agreement, but was not given a copy of the same on that particular day a nd as a result did not remember the nature of the said document which the parties thereto signed . When she was subsequently availed a copy the Plaintiff (PWl) learnt that the said copy was not a loan agreement but a contract of sale. According to the Plaintiff (PW 1), the document which she signed and the copy which s h e later received from the 1st Defendant were different. The Plaintiff (PWl) has averred that the transaction was a loan and not a sale. Conversely DW averred that when the Plaintiff (PW 1) got the money from the 1st Defendant it was agreed that the Plaintiff (PWl) had the option of buying back the property from the 1 st Defendant if the Plaintiff (PWl) paid b ack the amount advanced to Plaintiff (PWl) by 11 th January, 2018. I note Jl4 I • that the would used by DW is "amount advanced." This resonates well with the evidence by the Plaintiff (PW 1) that the money which she received from the 1st Defendant was a loan (advance) and not a sale. In fact paragraph 3 of the witness statement of DW showeth that the money which the Plaintiff (PWl) received from the 1st Defendant was an advance to the Plaintiff (PWl). Further, that only if Plaintiff (PWl) did not pay back the money advanced by 11 th January, 2018 would the ownership of the property be changed to the 2 nd Defendant. This is sufficient confirmation that the tr ans action wa s a loan and the property was collateral for t h e loan. Wh a t I discern from this is that the intention of th e p ar t ies was for all intents and purposes to treat the transaction as a loan . But when the Plaintiff (PWl) defaulted on 1 Ith January 2 018, the Defendants availed th em selves property number 462, Chilanga which was pled ged as collateral. On the a bove basis, I d eclar e that the transaction was a loan a nd n ot a sale . The Pla intiff shall therefore , r epay to the 1s t Defendant the loa n a mount within 90 days from the d a te h er eof, in d efault, then , the 1s t Defendant shall s ell property number 4 62 , Chilanga to r ecover the loan JlS owing and any surplus money thereof (if any) shall be given to the Plaintiff. Claim iv: An order of declaration that the charge by the 1st Defendant of interest at 47% for a period of six (6) months is unlawful and void ab initio for being excessive and unconscionable Am alive to the prov1s10ns of the Money Lenders Act Chapter 398 of the Laws of the Republic of Zambia. S. 15 (1) of the Money Lenders Act Chapter 398 aforesaid provides interest at the rate not exceeding 48%. The precise terms of section 15 of the Money Lenders Act Chapter 398 of the Laws of Zambia read as follows; ( 1) Where, in any proceedings in respect of any money lent by a money-lender after the commencement of this Act or in respect of any agreement or security made or taken after the commencement of this Act in respect of money lent either before or after the commencement of this Act, it is found that the interest charged exceeds the rate of forty-eight centum per centum per annum, or the corresponding rate in respect of any other period, the court shall, unless the contrary is proved, J16 presume for the purposes of section fourteen, that the interest charged is excessive and that the transaction is harsh and unconscionable, but this provision shall be without prejudice to the powers of the court under that section where the court is satisfied that the interest charged, although not exceeding forty-eight per centum per annum, is excessive. My finding is that PWl received a total of K300,000 (Zambian currency) and the 1st Defendant required the Plaintiff to pay back a total of K600,000. What I discern from this is that the rate of interest was possibly 100%. I order that the Plaintiff shall pay the loan at the interest of 4 7 %. This s hall accrue from the date when the loan was obtained until full payment. This is on the princi~ sum of K300,000= which the Plaintiff was loaned for 6 months repayment period and thereafter at short term bank d eposit rate from the date when this matter was filed into court to date of judgment and thereafter at the current Bank of Zambia lending rate . Claim v: An order of declaration that the money payable by the Plaintiff to the 1st Defendant shall be K300,000 Jl7 Ii plus such interest as a money lender is permitted to charge by law. There is a dispute. The dispute is that the Plaintiff has insisted that she received from the 1s t Defendant a cash amount of K300,000. Conversely, the Defendants have stated a different amount which is quoted in USD currency. The Plaintiff stated that of the K300,000, the 1s t Defendant first paid to the Plaintiff Kl00,000. Then K200,000 was credited to the account of Plaintiff by direct deposit by the 1s t Defendant. On the above basis, Am satisfied that what the Plaintiff got from the 1st Defenda nt was K300 ,000. It is this K300,000 which is now due from the Plaintiff to the Defendant. I have alr ead y in dicated that this shall carry interest at 4 7% for th e first 6 months which was the agreed repayment p eriod . Ther eafter , the interest shall be at the short term b ank d eposit rate from the date when this matter was fil ed into court to date of judgment and thereafter at the current Ba nk of Zambia lending rate . Claim vi: In the alternative to claim (iii} (iv} and (v), the Plaintiff seeks damages for breach of the alleged contract of sale relating to stand number 462, Chilanga between the Plaintiff and the 1 st Defendant dated 12th July, 2017 for nonpayment of the alleged J18 full purchase price and fraudulent change of ownership This claim is in the alternative to claims (iii) (iv) and (v). I have already held in favour of the Plaintiff in\respect of claims (iii), (iv) and (v). This alternative claim number (vi), therefore, falls away. Claim vii: Rescission of the contract referred to in (vi) above. This claim is also in the alternative to claims (iii), (iv) and (v). For the reasons which I have given earlier on claim (vi) above, this claim also fells away. Claim viii: Costs. It is trite that costs follow the event. It is also trite that costs are award ed in the discretion of the court. I have seen no reason to deny the Plaintiff her costs. I accordingly, award the Plaintiff the costs of these proceedings to be taxed in default of agreement. Now, I turn to the counter claims by the Defendants. The Plaintiff has succeeded on all material facts. The Plaintiffs success h as left this counter claim with no legs J19 ... t · ; ~- - - -........... -----------..:.~.t. I .1 l " :( to stand on. This counter claim, therefore, fails and falls Leave to appeal is granted. away accordingly. '., I I ! Due to the phobia for covid 19, this judgment shall not be read to the parties in open court but I order that the parties shall proceed to uplift their copies. DATED AT LUSAKA THIS THE 20TH DAY OF MAY, 2021. .................................................... HON. MR JUSTICE E. L. MUSONA HIGH COURT JUDGE J20